Nonresident aliens must follow special instructions when completing Form W-4
Allowance Certificates
Employee’s Withholding Allowance Certificate are available at http://www.irs.gov/pub/irs-pdf/fw4.pdf, for compensation paid to such individuals as employees performing dependent personal services in the United States of America.
Compensation.
Compensation for dependent personal services includes amounts paid as wages, salaries, fees, bonuses, commissions, compensatory scholarships, fellowship income, and similar designations for amounts paid to an employee.
Are you a nonresident alien? NA
These special tax instructions apply to you.
Resident aliens should follow the instructions on Form W-4.
If you are an alien individual (that is, an individual who is not a U.S. citizen), specific rules apply to determine if you are a resident alien or a nonresident alien for federal income tax purposes.
Generally, you are a resident alien if you meet either the “green card test,” discussed at http://www.irs.gov/ businesses/small/international/article/0,,id=96314,00.html, or the “substantial presence test,” discussed at http://www.irs.gov/ businesses/small/international/article/0,,id=96352,00.html, for the calendar year.
Not meeting the test requirements
Any alien individual not meeting either test is generally a nonresident alien. Additionally, a dual-resident alien who applies the so-called “tie-breaker” rules contained within the Resident (or Residence or Fiscal Residence) article of an applicable United States income tax treaty in favor of the other Contracting State is treated as a nonresident alien.
See Publication 519, U.S. Tax Guide for Aliens, available at http:// www.irs.gov/pub/irs-pdf/p519.pdf, for more information on the green card test and the substantial presence test.
Compensation.
What compensation is subject to withholding and requires a Form W-4?
Compensation paid to a nonresident alien for performing personal services as an employee in the United States is subject to graduated withholding.
Compensation for personal services also includes amounts paid as a scholarship or fellowship grant to the extent it represents payment for past, present, or future services performed as an employee in the United States.
Nonresident aliens must complete Form W-4 using the modified instructions provided later, so that employers can withhold the correct amount of federal income tax from compensation paid for personal services performed in the United States.
This Notice modifies the instructions on Form W-4 to take into account the restrictions on a nonresident alien’s filing status, the limited number of personal exemptions allowed, and the restriction on claiming the standard deduction.
